Could a Managed Services Agreement Save Your Company Tens of Thousands of Dollars Each Year?

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1 MANAGED IT SERVICES

2 Could a Managed Services Agreement Save Your Company Tens of Thousands of Dollars Each Year?

3 A lot of business owners, executives, and managers have a love-hate relationship with managed services IT agreements. Or, to be more accurate, they have a hate-love relationship with them, since they usually dislike the idea at first, warm to it over time, and eventually start to wonder how they ever got along without one. Over the next few pages, we re going to show you exactly why that is, and how having the right managed services agreement in place could actually save you tens of thousands of dollars every year, while making your company stronger at the same time. To see why that is, you first have to understand what exactly goes into a managed services agreement. In traditional information technology agreements, clients and their outsourced IT teams follow what we call a break-fix model of doing business. Simply put, the client calls their IT provider when something is broken and needs repair. The IT firm, in turn, handles the problem, gets the systems back up and running, and might even make a few recommendations on how to avoid similar problems in the future. Since the client is only invoiced for the billable hours needed in this kind of arrangement, it might seem like a lessexpensive way to handle technology. The problem, however, is that you aren t getting the most from your IT team instead of helping you to work more efficiently, or better yet prevent technology problems, they are simply responding to issues as they arise. hardware and software. Because of the time and expense that are inherent with unplanned downtime, it makes more sense to have your IT team working proactively to make sure your systems are as safe and reliable as they could be in the first place. Even more importantly, they could be looking for new opportunities to improve your technology or lower your expenses without you having to pay for expensive emergency repair time. And that, in its essence, is what a managed services agreement is all about. Instead of calling your IT provider when something has gone wrong, you work with them to ensure that you have the best tools available to meet your business challenges, and use them within the context of your overall operating budgets and strategic goals. A good managed services agreement is all about bringing your IT partner in and having both of you sit on the same side of the table, working to make technology an important part of your company, rather than something you simply pay to have fixed when it s broken. In the rest of this report, we re going to show you some of the specific ways that a managed services agreement can save your company a lot of money every year. As you read them, though, remember that it s all about better cooperation and proactive thinking when it comes to your hardware, software, communications, data security, and other technology elements. In other words, managed services is more about getting real value from your technology budget. This isn t a very efficient way to deal with your 3

4 Managed Services Can Eliminate The Need For An In-House Technology Professional There is no such thing as a small expense when it comes to hiring a new employee, or replacing one who has moved on. That s particularly true in technology, where finding someone to manage your hardware and software takes the right mixture of education, experience, and training. According to one survey, the current average salary for an IT manager falls between $90-130,000 1, and that figure doesn t include recruiting costs, benefits, ongoing education or other expenses. Add to that the fact that a relatively high percentage of new hires leave within 12 months, and you have the formula for a high expense, low return on investment from an IT professional if you aren t able to hire the right person to start. How can you take away some of the time and expense of the process? With the right managed services agreement, you can drastically reduce or eliminate the size of your in-house IT staff. That s because you ll have a team of trained professionals looking after your technology around the clock, and that predictable monthly rate doesn t have to include things like benefits and vacation time. As any seasoned HR executive can tell you, the costs of hiring, training, retaining, and replacing employees in any part of your company can be severe. By eliminating the biggest bulk of those expenses without sacrificing what you are able to do with your technology, you may be able to improve your bottom-line picture in a very short amount of time. How much could you save with managed services over a regular full-time employee? It s impossible to say without a review of your technology needs, but it could be more than you would think

5 A Good IT Provider Can Provide Coverage That Employees Can t Although saving on salaries and benefits may be the thing that grabs a business owner or executive s attention most quickly, it s often the more complete IT coverage that ends up truly winning them over. Consider this: When you have a full-time IT professional on staff, or even several, you have reduced the burden for managing your company s technology into a small concentration of personnel. While they may get to know your business and its hardware and software configurations intimately, they are personally tasked with keeping up on IT trends, as well as knowing any custom or industry-specific applications you use, while actively monitoring your systems. Add into that the fact that these professionals can only work so many hours a day, need regular sick days and vacation time, and can only address one issue at a time, and you can start to see the inherent limitations that come with a small in-house IT team. An outsourced IT provider, working within a managed services agreement, isn t bound by any of these constraints. For one thing, they will have lots of different employees, and maybe dozens. Each of those team members can not only maintain different specialties, but also different schedules. That means that you can always have someone oncall who can deal with issues as they come up in real time. It also means that you don t have to worry about illnesses, personal conflicts, and other scheduling issues to cause disruptions with your IT coverage. It would take a very large and expensive in-house IT department to come close to matching the versatility and around-the-clock care that an outsourced technology team can provide. What is it worth to have the best IT support for your organization especially if it comes at a lower cost than regular employees do? 5

6 Your IT Partner Can Prevent Downtime, Lost Files, And Other Catastrophes Sometimes, the value of a great managed services agreement can be hidden. That s because it can save you hundreds of thousands of dollars or more in the prevention of costly IT disasters like extended downtime, lost customer data, and other major technological failures. You might not ever see these on your balance sheet, but avoiding them is crucial to the health and future of your company. If that sounds like an overstatement of the problem, consider that one survey showed that, although many companies were only running thorough backups of their data once a year, 25% of those backups failed to recover. Worse yet, another study estimated that fewer than one out of every 10 businesses could survive a loss of its most important data and applications. The bottom line message is clear: If you don t have a comprehensive system in place to protect your technology from major failures, and a contingency plan to deal with it if and when they do, then you are asking for trouble. It only takes one unexpected storm, fire, earthquake, or other tragedy to throw even the best hardware and software out of service. And even if you are fortunate enough to avoid those kinds of problems, there are also issues of access and vandalism to worry about from both inside and outside of your company. By proactively monitoring your technology for problems, and then instituting a good backup and disaster recovery plan that can have you fully operational within hours, a good IT provider can literally save your business with a managed services agreement. It s hard to put a price or bottom-line value on that kind of protection, but if you could, it might easily stretch into six figures or more. 6

7 Having A Managed Services Provider Frees Up Your Non-Technical Employees To Stop Worrying About Technology If you have ever watched your best salesperson waste their day struggling to get their back online, lost a valuable customer service employee for an afternoon over hardware installation, or saw one of your managers waste their time trying to resolve a technical problem, then you probably already have an idea that these kinds of situations cost you more than you think. Even so, you might not have ever realized just how expensive they really are. Suppose for a moment that some piece of your technology isn t working the way it s supposed to, and a member of your administrative staff is forced to abandon his or her duties to try to correct the problem. Assuming this person earns a salary of $35,000 a year, having them spend a week of their time on technology has already cost you $700. Even more expensive, however, is the spillover effect from having them not able to complete the tasks that are part of their real work. Those effects will likely spill over to other employees, as well, and come with the strong possibility that your technology won t work the way it was supposed to, and may encounter more problems in the future. This is only a simplified example, of course, but it underscores the point that having non-technical employees use their time on IT tasks saves you neither time nor money. By having a good managed services agreement in place with an IT team that knows your company s technology inside and out you can avoid this kind of waste and inefficiency. On the one hand, a good managed services package stops you from having these problems to begin with, and on the other it gets your employees back to work on their own projects quickly without having to deal with them. 7

8 A Managed Services Agreement Is Scalable So far, we have looked at a number of ways that a good managed services agreement can help you save money now. But how confident do you feel that your company s technology needs will change in the future? How easy would it be for you to grow your technology along with the rest of your company, or to scale it back in an effort to cut costs and become more profitable? The scalable nature of a managed services agreement is an extremelyvaluable but oftenoverlooked benefit of having an outsourced IT team. Because you are agreeing to fixed rates over the short term, rather than long-term contracts, salaries, and new staff members, choosing a managed services provider can make your organization much more flexible than it would be otherwise. In other words, it frees you up to invest your company s money where it s likely to have the most impact, not to the places where you have previously committed it. We live in an age where business is changing faster than ever before, and flexibility is as important to your organization s success as its size, customer base, or history. Making your IT department a scalable expense, and one you can expand quickly and temporarily to meet new challenges, is simply good business. Not only that, but it could save you tens of thousands of dollars in unwanted future costs. Now that we have looked at exactly what a managed services agreement is, and examined some of the ways it can help you to get more from your technology while saving you lots of money, it s time to point out that not all managed services plans are the same. In fact, choosing the right IT provider can mean all the difference between enjoying these bottom-line benefits and simply replacing one set of technology expenses for another. 8

9 Here are five things you should look for in any IT provider that you are considering for an ongoing managed services agreement: Strong IT skills and backgrounds. On the most basic level, it s important that your outsourced IT partner be competent with a wide variety of hardware and software systems. This will often be reflected in the education and certifications they have, as well as a number of years worth of experience in various fields. The right reputation. The easiest way to tell a great outsourced IT partner from a good one isn t by reading their sales literature or even clearing their presentation it s in learning what their past and current clients say about them. If an IT company has treated others customers well, has a solid reputation, and has done a good job managing technology for many years, then there s no reason to think they won t do the same for you. Flexibility and room to grow. Since one of the biggest benefits of managed services agreement is the scalability it can offer, you ll want to choose an IT partner who has room to grow with you. There are certainly a lot of great small firms out there, in our business and every other, but if your future plans include more customers, a bigger base of operations, or other changes, then make sure to choose an IT firm that can handle a bigger account. Strategic guidance. As we hope you have seen, great managed services isn t simply about fixing problems, or even avoiding them. That s because your outsourced IT team should be looking for ways to actively improve your company. Whether it s through a virtual CIO service or simple account reviews, you want a technology partner that s squarely on your side helping you to make the best business decisions possible. A collaborative mindset. There are a lot of ways to come out ahead with a managed services agreement, including the cost savings we ve outlined in this document. Where you really benefit, though, is from having a team that is knowledgeable about hardware, software, and your company acting as a member of the team, rather than as an outside vendor. Read testimonials and case studies to ensure that your outsourced IT provider has a collaborative mindset, because that s the most important ingredient to any managed services package. Are you ready to start getting more from your technology? Let the team at MBC help. We have become one of Toronto s best-known technology partners particularly in the demanding accounting, investment banking, legal, and engineering industries because we know how important reliability and performance are to your business. 9

10 Contact us today to find out how easy it is to get started with one of our managed services packages and what kind of difference they can make in your organization. MBC Computer Solutions Ltd. 70 East Beaver Creek Rd., Unit 43 Richmond Hill, Ontario Canada, L4B 3B2 Phone: +1 (905) Fax: +1 (905) Sales: Support:

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